Urban Economics Assignment Essay
Brewing is a market-oriented industry, so it locates close to its consumers to economize on transport cost. B) Most wineries locate close to their input sources because wine production s a weight-losing activity and the grapes are costly to transport because of the spoilage. Firms in the materials-oriented industry locate close to input suppliers to economize on transport cost. Chapter 3 2 a) In an isolated site, the wage is variable and the firm’s workforce is fixed because the supply of labor perfectly inelastic.
) In a cluster, the wage is fixed and the firm’s workforce is variable because the supply of labor is perfectly elastic. Nefariousness’s’ Embroiderer’s’ 40 30 20 50 Embroiderer’s’ 60 Unforeseeable’ ) During good time, the benefit of being in the cluster as opposed to being isolated is $550, compute as c) During bad time, the benefit of being in the cluster as opposed to being isolated is $450, compute as d) The benefit exceeds the cost because a firm in a cluster changes its workforce when demand changes.
B:’Cluster’with’many’firm’ A:’lassitude’s’ $1 nefariousness’s’ 10′ embroiderer’s’ b) In the typical big city high demand, his profit is $135 computed as c) In the typical big city low demand, his profit is $15 computed as ) In the typical small city high demand, his profit is $60 computed as e) In the typical small city low demand, his profit is $60 computed as f) His expected profit is $75 in a big city, compared to $60 in a small city. 6 a) Somerville has 6 models, equally spaced on the color wheel at 1 2:00, 2:00, 4:00 and so on.
There will be 2 firms in the city, with firm A @ 12:00 and the other firm b) The’ firm’ at’ 12:00′ hires’ models’ @ 10:00,’ 12:00′ and’ 2:00;’ the’ firm’ 8:00. ‘ 3′ 9’ 6 c) For the typical firm, the average mismatch is 4/3 skin tones and the average keep cost is $4 and the average net wage after makeup costs is $1 8 computed as $20-(4/3) d) Bigger will have 4 firms, and its average makeup costs will be lower and its average net wage will be higher. Of Hookers Skill Gap Makeup Cost Net Wage 4/3 $4 $16 12 2/3 $2 $18 # of firms Cars sold in cluster Cars sold per firm Profit per firm Profit gap 1 3 $3000 $0 2 18 9 $9000 $6000 36 $12000 b) If initially all dealers are isolated and the one joins another to form a two- dealer cluster, other firm will have an incentive to join the cluster because the second firm earns $6000 more in profit.